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Mycoplasma Bovis - right to compensation

27 July 2018

Mycoplasma Bovis (M. Bovis) has been labelled as one of the worst economic diseases to spread to rural New Zealand and has triggered a resolute biosecurity response from the Ministry for Primary Industries (MPI). To date over 50 properties throughout New Zealand have been categorised as ‘Infected’ by MPI, making restrictions on stock movement widespread. Farmers are advised to exercise caution when purchasing/leasing stock or allowing access to their farms to prevent the further spread of the disease and consequential culling of animals. This article focusses on the compensation available to farmers affected by M. Bovis and cautions against potential losses that may not qualify for compensation.

What is covered for compensation?

The Biosecurity Act 1993 (Act) provides for MPI to pay compensation in certain circumstances where loss is suffered due to MPI exercising a legislative power. Compensation is necessary to encourage the immediate reporting of the disease and to fairly compensate those affected when working with MPI. MPI will reimburse farmers affected by M. Bovis where loss is suffered due to MPI damaging or destroying property (e.g. culling cattle) or imposing restrictions. The most common restrictions imposed by MPI are Restricted Place Notices which prohibit all stock movements and the movement of other risk goods on or off infected farms or farms suspected of being infected, or alternatively, Notices of Direction (NoD) which prohibit the removal of stock and other risk goods pending testing being completed (e.g. a NoD may be issued if some stock on the farm came from an infected farm). In order to be reimbursed, farmers will need to verify their losses by providing MPI with proof of the amount of loss as well as proof that all reasonable steps were taken to mitigate the loss.

What is not covered?

The Act does not require MPI to compensate farmers in the following situations:

If the loss was suffered before MPI exercised its powers (e.g. precautionary measures taken by farmers before actual direction by MPI);

The loss was caused by actions taken by the farmer above and beyond MPI’s directions;

There was a serious or significant failure by the farmer in complying with biosecurity law or a failure which contributed to the presence or spread of the disease;

The loss was caused by the disease itself and not MPI’s exercise of powers;

Loss was caused or contributed to by the presence of unauthorised goods (e.g. illegally imported items);

The farmer is not directly affected by the exercise of powers (e.g. a farmer losing grazing contracts due to reduced stock movements or the contamination of his farm); or

A claim for compensation is not submitted within 12 months of the loss being incurred.

Ex gratia payments

In limited circumstances the Crown may consider providing compensation where the provisions of the Act do not require MPI to make such payment, however, this is considered on a case-by-case basis with no obligation to make any particular payment.

MPI has a range of resources available on its website to assist farmers with best practice in identifying and reducing the spread of M. Bovis. If farmers have any queries regarding the amount or qualification for compensation, then they should seek legal advice from a lawyer specialising in the area.